In order to get a mortgage we need to be able to verify the buyers income. In the past there were all kinds of loans that made it very easy to qualify – stated income, no documentation types of loans along with the regular conventional and FHA loans. Due to the current economy and the number of foreclosures, stated income loans are just about impossible to find and in Minnesota the only ones that can even do a stated income loan is a federal or state regulated bank. I have lots of people ask questions about income and what they can do. Equity in a home or fantastic credit won't help you get a mortgage if we can't verify your income.
There are different kinds of income. The majority of people are employed by companies and get regular paychecks and w-2's at the end of the year. For those people, mortgage companies will require a paystub and two years of w-2's to show verify your income. If you have overtime, we will use it as long as we can show that it will continue.
If you are self employed, you have to have a two year history and have filed a schedule C with your tax returns for at least two years. If your company is a corporation, you will have a corporate return that we will use along with your personal income tax returns. Most of the time your income will be averaged over those two years.
If you have commission income, you also need a two year history of receiving commissions. We will want to see two years of tax returns, we are looking to see if there are business expenses that need to be deducted from your income.
If your income is from retirement, social security or disability, we will need award letters or statements showing what you get and how long it will continue. For child support income, you have to show a court document and receipt of the support for at least three months. The income also needs to continue for at least three years. Usually the lender will want three months of bank statements showing that the income has been received every month.
The basic standard for income is that it is stable and can be verified. You need to show that it will continue so that you will have the ability to pay the mortgage. If you get paid in cash, we can't use it. If you get hand written paystubs, we need to show w-2's and a written verification of employment from your employer. If we can't verify your income, we won't be able to use it for your mortgage.
Leslie Vanderwerf, Advisors Mortgage - lvanderwerf@advisorsmtg.com – Website
